03 April 2024, GBP/USD
Events to watch out for today:
17:00 EET. USD - ISM Services Business Activity Index
19:10 EET. USD - Federal Reserve Chairman Jerome Powell to deliver speech
GBPUSD:
GBPUSD remains vulnerable due to slowing UK inflation and gloomy market sentiment. Traders will be keeping a close eye on Wednesday's Fed speech as it could provide some hints on the interest rate trajectory and policy outlook.
On Tuesday, many Fed officials spoke about the outlook for monetary policy. FRB Cleveland President Loretta Mester said she still expects interest rates to fall this year but ruled out the possibility of another meeting in May. San Francisco FRB President Mary Daly also expects to cut rates this year, but only after new evidence that inflation has cooled. San Francisco Fed President Daley said three rate cuts this year is a "very reasonable baseline," although nothing is guaranteed. According to CME FedWatch Tool, investors now estimate the probability of a rate cut by June is about 65%, up from about 70% after the Fed's March meeting.
On Tuesday, February JOLTS data on U.S. job openings rose to 8.756 million in February from a downwardly revised 8.748 million in January, which was better than market estimates. Meanwhile, factory orders improved to 1.4% m/m in February after falling 3.8% in the previous reading.
Traders are raising bets that the Bank of England (BoE) will cut interest rates ahead of the US Federal Reserve this year, putting pressure on the Pound Sterling (GBP). In addition, weakening UK inflation and gloomy market sentiment may put pressure on the Pound Sterling and limit the growth of the GBP/USD pair.
Trading recommendation: Trade predominantly with sell orders from the current price level
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